Transaction Risks and Governance Choice for the Urban-Rural Transfer of Development Right in China: The Case of Chengdu

To enhance the utilization efficiency of existing construction land and promote integrated urban–rural development, China’s government has implemented the “Linkage” Policy, which has commodified land development rights and reallocated urban–rural development potential. In recent years, a growing number of studies have examined the diversified governance structures of “Linkage” projects, which has deepened our understanding of China’s project-based rural land governance. However, most studies have focused primarily on governance performance while neglecting the comparative advantages of different governance structures in improving process efficiency, particularly within the same local institutional environment. To fill this gap, this study first conceptualizes the transactions and sub-transactions in the Transfer of Development Rights (TDR) and then systematically assesses the associated organizational risks. Drawing on Transaction Cost Theory, this paper analyzes how governance diversity mitigates risks and optimizes efficiency. Empirically, this research employs a comparative case study approach, examining three representative governance modes using data triangulation to ensure robust findings. Finally, the theoretical and empirical analyses yield three key findings regarding China’s TDR system: First, given the inherent complexity and substantial financial investment required, the efficient implementation of China’s rural land development projects necessitates leveraging complementary stakeholder strengths. Second, transaction risks constitute the primary source of transaction costs and the central concern of all governance structures. Third, beyond governance structure selection, local institutional innovations and collective action mechanisms significantly enhance governance efficiency.